After the announcement of the deal between Pakistan and International Monetary Fund (IMF), the Pakistan Stock Exchange (PSX) suffered a huge blow by falling more than Nine-Hundred points with the benchmark KSE-100 Shares Index shedding 937 points — a loss of estimated more than 2.7 per cent — during intra-day trading.
Interestingly, the trading opened at 34,716 points and showed an upward activity for a few minutes before adopting a negative trajectory for the rest of the session.
The market closed at 33,900 points down 816 points or 2.4 per cent. The benchmark touched a day’s high at 35,228 points up 512 points during first few minutes of the session. It touched a day’s bottom at 33,779 points down 816 points or 2.4pc near the end of the session.
As many as 89.9 million shares of the benchmark companies, worth Rs4.7 billion, changed hands during the session.
Mohammad Faizan, an analyst and head of foreign institutional sales at the Next Capital Limited, held the tough conditions attached with the IMF bailout package responsible for bearish rule at the bourse.
“As a result of the attached conditions by the IMF, heavy taxation is to be slapped on the consumers to improvise the target collection by a further PKR650-700bn triggering further inflationary pressures and slowing down economic growth.”
Another senior analyst Ahsan Mehanti also shared the same views. “Investors fear impact of prior actions and agreed conditions in the upcoming budget, leading to increase in taxes and utility prices to obtain a 39-month Extended Fund Facility (EFF) for $6b,” the analyst said.
“The agreement is subject to IMF Board approval and timely implementation of economic policies to resolve low growth, high inflation, high indebtedness and weak external position,” he added.